As never before, the importance of Customer Relationship Management (CRM) to growing a company’s bottom line cannot be underestimated.  While many of the CRM activities are now automated, all CRM cost factors figure prominently in any business budget.  When companies shop for an ERP system, CRM cost of maintenance, ownership, and return of investment represent a very real component to the overall success of an organization.

CRM Cost

CRM Cost, One Part of the Cost of Doing Business

There are certain commonalities in business regardless of industry, product or business sector CRM is one of them.  Without efficient, effective customer relationship management, the very purpose of a business organization’s existence is negated; after all, a formulaic truth for all business is:
no customers=no business.

Justification of CRM cost is easy based on this simple principle.  No business can exist for long without both retaining and growing its customer based.  Basic customer husbandry is crucial but so is the necessary information required to identify and gain new customers for a company’s product or services.

Customer Relationship Management gets high priority in any business venture and as such, large investments are made in both CRM software packages and personnel.  CRM functionality and CRM cost are highly visible at all levels and often come under very pointed scrutiny.
Business experts are quick to point out the advantages of CRM software.  Microsoft, Siebel, SAP and a host of others have gotten into the market as providers of CRM applications.  There is money to be made on both sides of the business aisle.  The utilization of CRM systems can take many forms and is constantly evolving.  

Information is power and information is money.  Accurate demographics and the sharing of that information identify potential customers and growth opportunities within an organization plant the seeds for the future.  Efficient communications with existing customers nurtures relationships and set the stage for return business and referrals.

Configuring CRM systems to work with The Internet has made the building of account dedicated web pages freeing customers to track their orders and accounts.  The lines of communication are more open than ever.  CRM cost is reined in by supporting lean initiatives and that means decreased overhead and increased profit margins.

So investing in the development of best practices in Customer Relationship Management is money well spent.  A CRM database that correctly identifies business opportunities is worth its weight in profits.When creating a CRM strategy Return on Investment (ROI) must be evaluated.  A CRM system is not limited to software but to the development of CRM best practices and the total cost of ownership (TCO) of a system.

The conventional wisdom among The Gartner Group and others is that
• IT should work with business units to build CRM system process creation.
• The business unit should champion the project and business case for CRM, not IT.
• Decision making should be guided by business best practices throughout all phases of CRM implementation and initiative.
• Don’t rely on ROI alone to justify the initiative, point out soft benefits.

CRM cost is a core expense of doing business today.  CRM is an industry in and of itself and a requirement that is no longer optional if an organization is to remain competitive.

Written by :

Amy Cruz